The FAFSA is the ultimate gatekeeper and starting point in the college access game. It defines access to the two main resources of government assistance – Pell grants and federal student loans – that largely shape college affordability discussions. It has become so popular and so comprehensive, in terms of the financial need picture it creates, that states have largely adopted the form as their own mechanism for annually distributing billions of dollars of grant aid as well.
While state use of federal application may seem to simplify the process for students and families (one application is always easier to submit than two), for many students it likely creates more problems than it solves.
The simple reason for all the headache is that the main forms of federal aid – Pell grants and federal student loans – are, for all intents and purposes, limitless pool while state aid pools aren’t. Whether you apply for federal aid in October of the year before you start classes or apply a week before classes start, if you’re eligible for say $3,500 in Pell and $7,500 in federal student loans, it is guaranteed to be available to you.
State aid budgets, in contrast, are limited, which means that even though they use the same application, the who and the when around how dollars get doled out looks very different. Some states make aid available on a first-come-first-serve basis, others set application deadlines that can be as early as the end of January or as late as the end of August depending on the particular program. Still other states may have a mix of programs with a mix of deadlines.
For the straight-from-high-school crowd this is less of a problem, but state aid deadlines don’t favor the growing share of non-traditional students who would benefit from grant aid but aren’t necessarily thinking about going to college a full year before enrolling. More and more working adult students enroll in shorter-term programs and are more likely to enroll in community colleges. The span between making the choice to go to college, and actually stepping foot in a classroom might be measured in just weeks versus months.
For these students, the chances of missing out on state grant aid is high. Our own research shows that more than a third of independent FAFSA filers over the age of 30 don’t complete their applications until June, which is well beyond the window of all but a few state programs.
How pronounced is the link between state grant programs and FAFSA filing patterns? Below is a chart showing west coast states. Take a look at California. Notwithstanding the traditional drop-off in December volume due to the holidays, monthly FAFSA applications plummet between March and April, which coincidentally aligns with the early March deadline for the CalGrant program.
California isn’t the only state where FAFSA applications fall off following the close of the state grant program. In the chart on the left below, we can see the same data for Idaho, Maryland, Michigan and West Virginia, which also all close their programs at the beginning of March. The most pronounced drop-off is in West Virginia, but you can see the tail-off happens in other states as well.
Contrast that with states where aid gets distributed on a first come first-serve basis (right graphic above). A significant number of applications come in during October and November – again our research shows these tend to largely be first-time students in the traditional track but notice how the distribution of applications from February to August tend to be far more uniform. This is what we’d expect from a program where applicants assume that aid is available at any time even if it actually isn’t.
It’s not evident in the data here but a more rigorous study that examined the correlation between state aid programs and FAFSA submission timing would probably also show that aid generosity plays a non-trivial role. In California, CalGrants for University of California students can be as high as $14,000 and up to $7,000 for Cal State students. Contrast that with Michigan where the Michigan Tuition Grant program caps out at $2,800 and the competitive scholarship program only offers grants of up to $1,000.
In the end, college affordability shouldn’t depend on the program one attends or the school one attends or when the decision to attend gets made. Low-income prospects are, by definition, facing economic hardship. Any public aid program where the evidence suggests that disproportionate populations of students are missing out on aid opportunities should be the subject of greater scrutiny and more public debate. Schools need to help everyone – from high schools, to students of all backgrounds, to government – think about finding the resources to make college more affordable and more uplifting for more people.
Join us on Nov. 18th for a webinar discussion on how the FAFSA completion and award letter confusion are impacting low-income and first-generation students in the western US.